Privatize NALCOR?

The head of the Newfoundland and Labrador First Party wants to turn Marine Atlantic over to the private sector:

“I say privatize it because it’s a government organization and it smacks of being government-run,” he said. “I think a lot of the problems they’re having sometimes deal with unions. ... Maybe a private operator will come in, get rid of the unions and get things back on an even keel. I think it’s a drastic step, but sometimes drastic measures are what’s needed.”

Makes you wonder how he’d feel about NALCOR, another Crown corporation that can’t seem to deliver on its commitments. The latest one is a 2007 commitment to clean up emissions from its thermal plant at Holyrood. 

According to NALCOR chief executive Ed Martin, he and his team are “aligned” on the issue  - shades of 2012 - but will take as much time as necessary to make a “quality decision”.

Someone should ask the people of Holyrood if they agree with Wayne Bennett.

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Holyrood pollution and the Great White Whale

According to the Telegram, Holyrood town council is expected to vote this week to ask the provincial energy company and the provincial government to follow through on commitments to reduce emissions from the thermal generating plant at Holyrood.

The problem both for the town is that it is stuck accepting NALCOR’s own contradictory statements on Holyrood.

On the one hand you have the statement contained in the provincial energy plan.  Under that version, the company would either install scrubbers and precipitators to deal with emissions or  - as a NALCOR spokesperson told the Telegram - “displace existing fossil fuel generation at the Holyrood generating station.”

But as Bond Papers readers know, Holyrood will be a crucial part of the NALCOR system no matter what.  This is not an either/or proposition.  The scrubbers and precipitators will have to be installed.  Even if the heavens open, miracles happen and NALCOR builds the Lower Churchill anytime in the next two decades, NALCOR plans to keep Holyrood on stream.

You don’t just have to believe your old e-scribbler.  Here’s exactly how NALCOR described it:

It is important to consider that whichever expansion scenario occurs, an isolated Island electrical system or interconnected to the Lower Churchill via HVDC link, Holyrood will be an integral and vital component of the electrical system for decades to come. In the isolated case Holyrood will continue to be a generating station; in the interconnected scenario its three generating units will operate as synchronous condensers, providing system stability, inertia and voltage control.

Things don’t get any better, by the by, if you try and follow Calamity Kathy Dunderdale’s version of things.

What seems to be going on here is pretty simple.  NALCOR and the Premier are obsessed with a hydro megaproject that they just can’t build.  Everything else is being held hostage by that obsession.

For example, power from central Newfoundland can’t be used to replace Holyrood since the connection to the Avalon can’t bear the added load NALCOR won’t upgrade that transmission capacity unless the LC goes ahead.  At the same time, NALCOR won’t pursue alternative generation – like say wind power – because it is fixated on the Lower Churchill.  This sort of stuff is well laid out in the LC environmental review documents. 

And if that weren’t bad enough a decades old moratorium on small hydro projects remains in place. The 2007 energy plan committed government to lift it or keep it in place in 2009, the year they were supposed to start the Lower Churchill.

Guess what?

That decision is held up, as well, because the Great White Whale remains just out of Ahab’s grasp.

So if the Holyrood town council wants to get their local air improved, the first thing they need to do is toss aside the bumpf coming from the provincial government and NALCOR about the Lower Churchill.

Instead, they need to hold NALCOR to the statements in its 20 year capital plan.

And that means they need to come up with a timetable to install emission reduction equipment on the facility that NALCOR says will be a vital part of its system for decades to come.

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HQ and NALCOR on same side in US transmission line play

Both Hydro-Quebec and NALCOR Energy support development of  a $2.0 billion power line into New York city.

Newfoundland and Labrador's state energy company, Nalcor, is also behind the project. The line would run from Canada under Lake Champlain, into the eastern U.S.

For Nalcor, the lines would allow it to export electricity to the U.S. from a proposed dam to be built at Lower Churchill Falls.

"Anything that increases competition and market access we see favourably," said Ariane Connor, a Hydro-Quebec spokesperson.

NALCOR signed a non-binding memorandum of understanding on the project earlier this year.

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China and CSIS: the naive and sentimental writers

Richard Fadden, head of the Canadian Security Intelligence Service said something a few days ago that did not go down well with many people.

In an interview taped on Monday past with Peter Mansbridge, Fadden said:

“We're in fact a bit worried in a couple of provinces that we have an indication that there's some political figures who have developed quite an attachment to foreign countries."

In the days since CBC broadcast the interview, Fadden issued a public apology in which he retracted his statement that CSIS was discussing with the Privy Council Office how best to deal with the provincial government’s involved.

Some commentators have made a big deal out of the fact Fadden made the comments this week, in advance of the G8/G20 meetings.  Others have taken the apology as a sign that Fadden has been reckless and that he may well be  - or ought to be - replaced very soon.

Two things:

1.  In the context of the week’s events, an apology and retraction would be absolutely necessary if only to save the Prime Minister’s face with foreign leaders.  But no one should take that official retraction for anything other than that.  Canada plays in the big leagues and Fadden is too experienced a public servant to make comments that are as off-the-wall as the apology might suggest. 

Fadden’s comments may alarm the uninformed  - and there are evidently plenty of those out there - but for anyone even passingly familiar with CSIS publicly available intelligence assessments there is no surprise in anything Fadden said. China has long been mounting a campaign of economic and political espionage around the globe.  The country’s aggressive moves into the energy sector is well known.  The two things together suggest a need for wariness, if not increased vigilance.

Incidentally, you can include in the ill-informed list none other than Brian Mulroney’s former chief of staff, Norman Spector. The facts are at cbc.ca.

2.  Around these parts, no one should be surprised either at the Chinese presence  or the potential naiveté of some provincial administrations. 

In 2004, the Williams administration signed a memorandum of understanding for the potential development of the Lower Churchill. 

The company – Sino-Energy – was a consortium of companies that included a state-owned Chinese corporation that has been involved in questionable arms shipments.  The memorandum of understanding gave Sino-Energy complete access to NALCOR information, including details of the interconnection between Churchill Falls and the rest of the North American energy grid.

Bond Papers discussed the MOU issue - including the national security implications – in a 2005 post. No one has followed up on the story since Jeff Ducharme started it. 

The Williams administration might not be on CSIS’ watch list  - they might; China might not be the only foreign country of concern either - but that doesn’t mean they been known to make some amateurish shag-ups when it comes to signing secret deals like that memorandum of understanding with questionable foreign companies.

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Lower Churchill cost estimates skyrocket

Touted in 2004/05 at under $4 billion, Premier Danny Williams referred to the Lower Churchill in the House of Assembly on Monday as a “a $6 billion to $12 billion project.”

Williams insisted though in other comments in the legislature that from “a perspective of the cost, I can tell you that this particular project is the lowest cost, the cheapest hydro-electric project in all of North America.”

In another response he repeated the claim:

Mr. Speaker, I just said it before and I will say it again. This is the lowest cost hydro-electric project in all of North America. That is equivalent to – could deal head on with La Romaine or any other projects that come on stream from Quebec.

That’s an odd statement since Hydro-Quebec’s La Romaine project, announced is 2009, is estimated to cost $6.5 billion.  The Lower Churchill has not yet been sanctioned and the provincial government’s energy company is still picking its way through cost estimates and route analyses.

The original expressions of interest package for the Lower Churchill - released by the provincial government in 2005  - is no longer available online from either the provincial government or its energy company but the government’s estimated cost  - $3.3 billion - is contained in a report compiled by TD Economics at the time.

The provincial government cancelled the expressions of interest process in 2006, preferring to “go-it-alone”.  With the cancellation of the EOI process, the provincial government effectively rejected a joint proposal from Hydro-Quebec and Ontario Hydro to develop the project in co-operation with the province.  That proposal included upgrades to transmission capability to Ontario which would have been borne by the Ontario and  Quebec partners.

Once Williams rejected the proposal Hydro-Quebec turned to Plan B.  That involved development of about 4,000 megawatts of wind energy within Quebec and another 4,000 megawatts of hydro power from new projects all within Quebec.

The go-it-alone option also didn’t turn out that way even after Williams rejected the proposal.  As natural resources minister Kathy Dunderdale revealed last September, Danny Williams and others spent five years in secret talks trying to lure Hydro-Quebec into a deal on the Lower Churchill.  In the process Williams abandoned his previous commitment that he wouldn’t cut a deal with Hydro-Quebec on the Lower Churchill unless it involved redress for the 1969 deal that led to the development of Churchill Falls.

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The Search for Meaning Challenge

In this case, the challenge is to find any place in either the official French or unofficial English versions of a recent decision by the Quebec energy regulator that says that NALCOR can’t wheel electricity through Quebec.

Anywhere.

Either language.

Or words that say the Regie turned down an application to wheel power through Quebec.

Bonus points if the person presenting the information works for the Canadian Broadcasting Corporation which persists in claiming that’s what the decision says.

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Make Shit Update (May 28):  CBC adds to the list of its unfounded claims with this one:

Nalcor, Newfoundland and Labrador's Crown-owned energy corporation, has been developing the $6.5-billion Lower Churchill project in central Labrador, but does not yet have a route to bring the energy to market.

There, in fact, two major routes.  The first is overland through Quebec.  it still exists, hasn’t been wiped off the map by anyone.  The second is the technically feasible but financially problematic route down through Newfoundland into Nova Scotia.

Within Quebec, there are at least five specific overland routes to five specific targets.  They are neatly listed in the Regie decision in both the English and French versions.

The problem for NALCOR isn’t a lack of routes to markets.

It’s a lack of markets.

Fortis and Enel getting special treatment from Williams gov under expropriation bill

At least two of companies whose long-term power purchase agreements were ripped up under the December 2008 expropriation bill will still get all their cash under long-term power purchase arrangements, according to natural resources minister Kathy Dunderdale.

Abitibi is not included in the arrangements, apparently.

Dunderdale told the House of Assembly on Thursday that:

…we made a commitment to both of those companies [Fortis and ENEL] that regardless of what happened with Abitibi, at the end of this process we would ensure that they were kept whole, that they were properly compensated for fair market value for the assets. The PPAs that they have with Abitibi would also be honoured, Mr. Speaker.

Dunderdale said that the provincial government’s energy corporation  - NALCOR  - is still discussing arrangements with the two companies. The power purchase arrangements date from 1997 and 2001. The exact duration is currently unknown to your humble e-scribbler but would typically be in the range of 20 to 30 years.

ENEL partnered with Abitibi on the Star Lake project to supply electricity to Newfoundland and Labrador Hydro. Bill 75 seized all the generating and transmission assets of the Star Lake partnership and revoked all the agreement related to it, as listed at Annex E of Bill 75. 

Dunderdale made no reference to the other companies also affected by the seizure:

• Clarica
• Sun Life Assurance
• Mutual Life Assurance
• Standard Life Assurance, and
• Industrial Life Assurance.

Fortis – the other company Dunderdale discussed – was a partner in the Exploits Hydro Partnership.  Under a long-term power-purchase agreement, Exploits partnership sold power to Newfoundland and Labrador Hydro.

Dunderdale also admitted what Bond Papers readers already knew:  the provincial government is paying for a long-term loan for the Exploits partnership.  The outstanding balance on the loan is $59 million.  The provincial government paid the 2009 instalment.

The hydro-electric assets are likely the only ones seized in 2008 that could generate any reliable revenue to offset the costs of environmental clean-up at former Abitibi sites in the province.  Payment of loans and royalties to the companies other than Abitibi as if the expropriation never happened would significantly reduce any revenue NALCOR could gain from the assets.

Dunderdale’s admission today could also further undermine any legal cases the provincial government is pursuing.  One of the problems government faced in recent Quebec court decisions on the Abitibi bankruptcy protection proceedings is that its environmental clean-up actions appeared to be aimed solely at Abitibi and were not part of the routine administration of provincial environmental laws.

Dunderdale’s admission makes it pretty clear that the government is treating some of the companies affected by the expropriation very differently from Abitibi.

Colouring the expropriation as aimed solely against Abitibi could also colour the move and undermine any defence of Abitibi’s NAFTA challenge.

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Desperation: NALCOR edition

As a rule, you don’t enhance your credibility by saying things which are demonstrably at odds with established facts.

Take for example a news release just issued by the provincial government’s energy company.  It reads like something from Hisself for polling season, not Ed Martin, but that’s another issue.

Just get a load of this bit:

Currently, there is a surplus of transmission capacity on the transmission grid which Hydro-Québec TransÉnergie was obligated to offer to Newfoundland and Labrador Hydro, a subsidiary of Nalcor Energy, under the Open Access Transmission Tariff (OATT), before suggesting more expensive upgrades. The surplus was never offered to Nalcor Energy. Instead, Nalcor was told it would have to pay for upgrades that were not required.

The most obvious problem for this is that NALCOR was not seeking to move energy today.  They wanted to option a block of power for 30 years to service a project which, as everyone knows, doesn’t even exist. As such, any current surplus – no pun intended – is irrelevant.

The studies for the future demand showed that capacity will be needed down the road a ways to handle the power coming from a project which still exists only in the over-wrought imaginations of the Old Man and his entourage.

Not surprisingly, though, this extra capacity would be exactly the sort of thing which – as NALCOR’s release confirms – both the company and the Premier have said repeatedly they’d be prepared to pay for whether it was in Quebec or New Brunswick.

So why is Ed Martin issuing news releases late on a Friday tilting at imaginary windmills?

Aside from desperately trying to ignite some distraction from the Expropriation FUBAR Follies or giving your humble e-scribbler yet more to ridicule, only the Old Man likely knows for sure.

But let us assume, for a second, that there is a surplus currently and NALCOR is willing to buy space today or was willing to scarf it up at any time back to 2006 when they first stuck in their request.

As part of the ongoing discussion they could have worked out a deal with Hydro Quebec at any point.  In fact, once the capacity studies were done, they had 45 days to either close the deal or merely indicate their intention to buy.

They didn’t do that.

Instead they started a round of procedural motions in front of the Quebec energy regulatory board.

Then after a couple of years of wrangling, they have managed to lose every single one of the five motions they brought.  They lost them not because the process was biased but because the motions themselves  - like this release - lacked merit and substance.

After all, if there is capacity on the line and if there was a project and if NALCOR was ready and willing to pay to get power to market, the company would have optioned the space rather than tried to stop the clock.

Since they haven’t optioned the space, then anyone with two clues can draw a logical conclusion.

Res ipsa loquitur, as the lawyers would say.

The facts speak for themselves.

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Potato, potato: hydro version

vocm.com is making much of the fact that NALCOR and Hydro Quebec are taking different interpretations of the ruling yesterday by Quebec’s energy regulator.

The truth of the whole affair is actually in VO’s news story.

Here’s what happened:  part of the ruling yesterday was on an effort by NALCOR to suspend the timelines under Quebec’s open access tariff rules that give a company with power to ship 45 days to either book the space or to signal and intention to book the space.

NALCOR didn’t want to book the space now, especially on a project that doesn’t really exist.  No markets.  No money.  Still mired in environmental assessments and all that.

So two and three years ago, they simply couldn’t afford to book space and build new lines for a project that – at the current pace – likely won’t even be sanctioned before the date NALCOR still claims they’ll be shipping power. Even today they still can’t afford to book the space because the project is entirely a figment of everyone’s imagination.

And here’s the line in the VO story that clinches it:

Nalcor counters that the Regie refused to suspend the timelines association with their request while the company was following formal complaint procedures, resulting in a termination of Nalcor's application.

So instead, there’s even more talk about a project to ship power to New Brunswick through the island of Newfoundland.  While that option has always been technically feasible, it has also always proven to be a route that doesn’t make economic sense.  You just can’t ship the power to distant markets in a way that you can still make money.

The reason is geography, especially for the Lower Churchill.  Look at it on a properly oriented map and you’ll notice it is actually farther away from any major market than any other hydro project in eastern Canada (current or proposed).

But whatever the problem with the Lower Churchill is, we know one thing for certain:  NALCOR boss Ed Martin  doesn’t think it is Hydro Quebec. 

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Lower Churchill: Imaginary project. Imaginary News Stories. (and one they ignore)

CTV  - via the Canadian Press’s Shawn McCarthy - got it wrong.

Badly wrong.

So too did the Globe:  they relied on McCarthy’s story.

VOCM got it wrong, too. 

They relied on NALCOR and the provincial government.  After all, Danny Williams admitted he hadn’t read a translation of the decision;  he was relying on four pages of “errors” from the decision by the Quebec energy regulatory board on three applications by Newfoundland and Labrador Hydro related to transmission lines through Quebec.

The Montreal Gazette got it right.

So too did CBC St. John’s, graced for the first time in a while by Hisself live and in person.

Here’s the CBC lede:

Quebec's energy regulator has turned down a request from Newfoundland and Labrador to intervene in an ongoing dispute over pushing power from a proposed hydroelectric megaproject across Quebec's power lines.

And here’s the Gazette [link above]

Hydro-Quebec's existing power lines don't have the capacity to transport energy from a new hydroelectric project in Labrador south to export markets, Quebec's energy board said in a controversial ruling Wednesday.

The CP story started out completely wrong:

Quebec’s energy regulator dealt a blow to Newfoundland and Labrador’s plan to develop a massive power project on the Lower Churchill River, denying the province’s push to have Hydro-Québec transmit electricity to markets in the U.S. and Canada.

One of the reasons CBC got the story right is because they have the actual decision.  They weren’t relying on the opinions  - legal or otherwise – of the same rocket scientists who delivered the Abitibi FUBAR Follies.

The Lower Churchill project has no markets and it has no money, other than what is coming from provincial taxpayers.  As such, it is a project that exists on paper;  it’s an imaginary project.

There is also absolutely nothing stopping NALCOR from doing what Danny Williams has committed to doing all along;  running power through Quebec and, if need be, paying for new transmission facilities to carry the power. Therefore, there is no reason to believe this decision by the Quebec energy regulator affects the Lower Churchill project at all;  therefore it is an imaginary news story, at least as presented by the people who got it wrong.

And by the way, in the got-it-wrong, imaginary news category,  the new CBC story  that the Premier is thinking of taking his campaign against Hydro-Quebec to the Untied States is way off:

The Régie de l'énergie dismissed a complaint of fair dealing from Nalcor, Newfoundland and Labrador's Crown-owned energy corporation.

NALCOR’s three applications to the Regie included in the decision on May 12 were about technical questions in the way certain calculations were made in preparing an assessment of the costs and implications of Hydro’s plan to wheel power from the imaginary Lower Churchill project to five destinations.

This wasn’t a “fair dealing” issue either directly in the sense of the other lawsuit NALCOR is pursuing, nor was it a decision against fair dealing, as implied by the sentence. 

But for all that, there is a huge Lower Churchill story the mainstream media continue to ignore.  What a time to bring it up, as Danny Williams is ranting once again about the evil Hydro-Quebec:

Despite five years of secret efforts, Danny Williams could not persuade Hydro-Quebec to take an ownership stake in the Lower Churchill without having to pay any compensation for the 1969 deal. That’s the story natural resources minister Kathy Dunderdale  - inadvertently - revealed last fall. 

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Big Oil has L’il Buddy available for offshore fight #cdnpoli #oilspill

If the oil companies operating offshore don’t like environment minister Jim Prentice’s plans to toughen up environmental and safety rules offshore, they might well be able to count on a very potent ally:  Newfoundland and Labrador Premier Danny Williams.

As BP told you last May, under section 5.1 of the Hebron fiscal agreement, the Government of Newfoundland and Labrador is obliged to side with the oil companies in fighting any regulatory change if the industry feels the changes “might adversely affect any Development Project” of the Hebron field.

David Pryce, vice-president of operations for the Canadian Association of Petroleum producers is quoted in the Globe cautioning against what the Globe and Mail described as “potentially punitive regulations”:

“Don’t be too quick to respond, and don’t be too restrictive. That’s a concern for the industry,” said David Pryce, vice-president of operations at the Canadian Association of Petroleum Producers in Calgary.

“The fact that there is this concern, and there are a lot of people talking about could it happen here, the [concerns] are do we get a response that’s beyond what’s needed here.”

On Monday, Danny Williams told the provincial legislature that offshore production operations here meant that an accident might be less likely to spill oil onshore compared to the incident in the Gulf of Mexico. During Question Period, Williams said:

From our own perspective, as recently as this morning, we have looked at just exactly what the situations are in the North Atlantic. It is a general understanding that because the offshore sites are significantly offshore and well east of the Province that the situation that could arise in Orphan Basin or Jeanne d’Arc or the Flemish Pass is that there is a lower likelihood that oil would actually come ashore in Newfoundland and Labrador. Now, that is not to say that it would not.

As well, we are dealing with a heavy crude oil out there, so from a fishing perspective, there is less likelihood that it would affect the fishery although it would certainly affect the gear. However, having said that, I am not trying to minimize the circumstances under any situation, we will make sure that we monitor this very closely and that we adopt the best practices in the world.

Only the Hebron oil field will produce heavy crude.  The others all produce oil of roughly the same weight relative to water as the oil currently leaking in the Gulf of Mexico (API 34).

The Government of Newfoundland and Labrador  - through its wholely owned subsidiary NALCOR - is a direct partner in offshore development with ownership stakes in one of the producing fields and with stakes in two projects under development, including the massive Hebron project.

While Prentice has no direct say in regulating the offshore, he appears to be echoing sentiment in the federal government for strong offshore regulation.

Under the 1985 Atlantic Accord, the Newfoundland Offshore Area is regulated through the Canada-Newfoundland and Labrador Offshore Petroleum Board.  The board is a joint venture between the the Government of Canada and the Government of Newfoundland and Labrador.

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Shawn the Bullet Dodger

labradore makes a couple of very interesting points about Danny Williams and the failed New Brunswick Power deal, what with a major story that remains unreported in the mainstream a full six months after it broke.

Frankly it’s hard to know what’s more interesting here:  Shawn’s failure, Danny’s intervention or the reason why the mainstream media continues to ignore a gigantic energy story in Newfoundland and Labrador that is directly related to the first two.

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Related: “Five years of secret talks…”

PUB quietly imposes water management deal

The public utilities board imposed a water management agreement on NALCOR and Churchill Falls (Labrador) Corporation on March 9, 2010. The reasons for the decision were filed separately ,

The PUB didn’t issue a news release when it issued the order, nor did it issue any sort of media advisory or news release on the half day of hearings it held into the application.

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Hydro: the wet weekend round-up

1.  A foundation of purest sandstone:  For those who are still following these things, the Telegram’s Rob Antle has a tidy little summary of the case which is the bedrock on which the provincial government’s legal challenge of the 1969 Churchill Falls power contract rests.

Self-Check:  How many paragraphs down did you get before you realised that – in and of itself - the case has absolutely nothing whatsoever to do with the 1969 ruckus?

2. More money for Quebec, yet more billable hours edition: The papers in la pas-si-belle-pour-Danny province have been filled with stories about the hearings over transmission and the promise to sue over good faith or lack thereof.

3.  Rien could possibly be further from the verite. In a scrum the other day, Hisself could recall the pages on which appeared stories in La Presse about the whole Labrador hydro thing from one angle or another.  Helene Baril’s summary of the issue in her January 12 story is tidy and accurate.  Ditto one on the 19th of January.

Not so another one on the 19th in which she writes:

Quatre ans plus tard, le premier ministre Danny Williams est toujours aussi déterminé à développer le Bas-Churchill sans l'aide de personne, et surtout sans celle d'Hydro-Québec.

Still prepared to develop the Lower Churchill without Hydro-Quebec?

Hardly.

Malheureusement en anglais seulement, 

Perhaps it’s time someone worked up:

a.  a French translation of the Dunderdale comments and,

b.  a French version of “Nothing could be further from the truth”.  ‘Pfft”  - another DW staple likely to be heard many times in the next few months -  already translates itself.

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Lower Churchill, Nova Scotia and NB Power: “The sheer economics of it…”

And it is not like people haven’t said this before:

Premier Darrell Dexter said he’s not surprised Newfoundland and Labrador is looking for a cheaper option than an underwater cable connection to Nova Scotia for moving energy from Lower Churchill to market.

"The sheer economics of it are undeniable in terms of a transportation corridor for that energy," the premier said after a cabinet meeting Thursday.

Read down a wee bit further in the Chronicle-herald story and you get this:

An SNC-Lavalin transmission system study for the Nova Scotia government estimates the cost of connecting Newfoundland and Nova Scotia at $800 million to $1.2 billion. The estimate of connecting Nova Scotia to New England is $2 billion to $3 billion.

Yes, stringing underwater power cables from some point in Newfoundland and Labrador to Nova Scotia would cost at least $1.2 billion.  Initial cost estimates are always low on megaprojects like this. 

But to get to that bit, you’d have to string the long from Gull Island, down to the coast of Labrador, across to the island of Newfoundland down to some point on the southwest coast of the island to get to the bit that costs at least $1.2 billion.

The cost of that plus the line out to Soldier’s Pond near St. John’s would be $2.0 billion or more.

You can tell the Nova Scotia option was never being seriously considered.  There isn’t any plan to do it currently under environmental review.

Now all this too has to make you wonder why Darrell joined in attacking Shawn Graham in New Brunswick. His whole position on this just didn’t make any sense before. And it really doesn’t make any sense now that he admits he knows the whole power line to Nova Scotia is just so much crap.

In fact, Dexter acknowledges the whole thing is crap because he adamantly insists that there’s no way Nova Scotia taxpayers would be on the hook to help build it.

“We’re not going to build it,” he said.

 

Not surprisingly, NALCOR Energy boss Ed Martin is talking about the cost of land transmission through Quebec. Hearings into NALCOR’s application/objections on that front are due to start this week. Land transmission is pretty much the only economically viable way of getting Labrador power out to any market.

The current estimate for building a new set of power lines across Quebec is $3.0 billion.  That’s not bad considering the estimates for the line Soldier’s Pond for a mere 800 megawatts.

You can tell the crowd at NALCOR understand the whole game currently being played.  Look at the way it wound up in the Telegram over the weekend:

Regardless of what happens, officials say the regulator's decisions will provide certainty for Newfoundland and Labrador's energy corporation as it tries to get the Lower Churchill hydro project off the ground.

"We've collected all the information we need," Nalcor Energy president Ed Martin said in an interview.

"This is one of the key pieces left. I'm going to have enough information (after) this to be able to complete my discussions with potential customers."

When people start talking about certainty, then you know they’ve comes to terms with reality.  “At least we’ll know for sure…” should be one of the stages of grief.

For the record and just for all those people who are still over the shock that the line through Gros Morne was a political racket for nothing, let’s get this straight as well.  The provincial government isn’t concerned that Hydro-Quebec is blocking the precious Legacy Project.

At least one person in the government is pissed off that the whole thing just can’t get off the ground for one simple thing:

the sheer economics of it.

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Innu seek halt to water management application

In a 51-page letter filed with the public utilities board on December 15, the Innu of Ekuanitshit are asking the border to refuse to approve any agreement or suspend NALCOR’s application based on NALCOR’s failure to adequately consult with them as provided under the Constitution Act, 1982.

Specifically, the Ekuanitshit Innu are seeking:

AN ORDER refusing to approve the agreement or, in the alternative, suspending Nalcor’s application and setting aside for future examination the duty to consult and accommodate the Innu of Ekuanishit; and

AN ORDER: that on an interim basis and in any event of the cause, Nalcor pay all expenses incurred by the Conseil des Innus de Ekuanitshit in connection with Nalcor’s application to the board, including costs of counsel, engineers, valuators, stenographers, accountants and other experts or assistants retained by or for the Conseil des Innus de Ekuanitshit in and about the inquiry; and
that Nalcor and the Conseil des Innus de Ekuanitshit are to attempt to agree on a procedure whereby, upon incurring costs and disbursements from time to time up to the end of the inquiry, trial, the intervenor will so advise the applicant and the applicant shall
pay them within a given time-frame, unless Nalcor objects, in which case it shall refer the matter to the Board.

The application for costs is based on the magnitude of the project, the scope of the potential infringement on the Innu’s aboriginal rights and the Innu’s lack of financial resources.

In a separate 143-page letter dated December 21, 2009, the Innu of Uashat Mak Mani-Utenam make the same application to the public utilities board.  Both letters include commentaries on aspects of the NALCOR proposal for the Lower Churchill.

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TWINCO seeks intervener status in water management decision

The Twin Falls Power Company is seeking intervener status in the hearings at the public utilities board into the water management application by NALCOR Energy for the Churchill River.

In a letter dated December 17, 2009, TWINCO president James Haynes said his company may be affected by any decision in the application.

2. Twinco has a Sublease with Churchill Falls (Labrador) Corporation Limited ("CF(L)Co") whereby CF(L)Co is obligated to supply 225 MW and 1.97 TWh of power and energy to Twinco, included as Exhibit 4 of the Application. Twinco supplies power to two customers, 10CC and Wabush Mines, both of which are located in Labrador West and as result Twinco could be affected depending on the disposition of this matter.

3. Twinco owns and operates two 230kv transmission lines that transmit power and energy from Churchill Falls to Labrador City and Wabush in western Labrador and as a result could be an affected transmission provider.

Twin Falls Power company is owned by Wabush Mines, IOC and  NALCOR with each company holding one third of the shares.  It supplies power to the mines in western Labrador. 

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Hebron cuts: Dunderdale blunders; will NALCOR alone foot bill for replacement work?

In the House of Assembly on Wednesday, natural resources minister Kathy Dunderdale confirmed what Bond Papers told you about on December 11:

There are no provisions of the final benefits agreement signed in August 2008 that cover a work cancellation and mandate that it has to be replaced by work of equal value or the cash equivalent.

Nothing could be further from the truth

Dunderdale issued a highly misleading news release on December 11 that claimed “any such issues were contemplated in the Benefits Agreement and the replacement value of the work was captured and protected."

As you learned here last week, nothing could be further from the truth.

Dunderdale told the legislature on Wednesday (December 16) that the agreement contained a provision on amendments and another on dispute resolution. There was no dispute, according to Dunderdale, as the parties came together and achieved an agreement.

Well that’s not the same as having “the replacement value of the work”  already “captured and protected”.  That’s not  “copper-fastened”, either as Dunderdale also claimed. That’s people getting together and hammering out a new deal which could include provisions among the partners as to who will foot the bill for what amounts to a political decision – the replacement benefits – rather than a purely commercial one.

. And as for that section on amendments, here it is in its entirety:

12.3 Amendment.

No amendment to this Agreement is effective unless made in writing and signed by authorized representatives of all Parties

Nor is the new deal an actual, finalised agreement.  As Dunderdale told the House of Assembly, there is an agreement in principle that must now be translated into a legal document.  There’s still lots of room for further changes, in other words in a project not due to be sanctioned until 2012.

Abandon Ship!

By the end of the questioning, Dunderdale became so rattled that she abandoned her false claim last week that the benefits were secured within the agreement:

Mr. Speaker, the parties came together, we did not even need to use mechanisms provided in the Hebron Benefits Agreement. [Emphasis added]

That pretty much blew what was left of her credibility out of the water.

Dunderdale also disclosed that the total value of the cancelled work is less than $50 million.  Her office earlier refused to disclose what they claimed was commercially sensitive information.

The Hebron partners – including the provincial government’s NALCOR Energy -cancelled the work because it was deemed “uneconomic and has significant execution and schedule risks” for the project Dunderdale estimates may cost as much as $7.0 billion.

NALCOR to foot bill?

If the agreement in principle is actually signed, it is unclear at this point if the $50 million of replacement work will be provided by the oil companies or by the provincial government’s energy company in its capacity as an equity partner on the project.

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No thanks to renegotiating ‘69 deal: Quebec

Quebec natural resources minister and deputy premier Nathalie Normadeau says Hydro Quebec isn’t interested in renegotiating the 1969 Churchill Falls power contract.

Okay, so like no one saw that coming.

And it’s not like Danny Williams can blame anyone in this province for feeding sooper sekrit information to the bad guys in Quebec.  He just said that to avoid answering simple questions and  - almost naturally – local media gave the unfounded comments top billing. 

Yes, front page of the print edition of the Telly and the top news spot on its website!

All for a load of shop-worn hooey.

In the meantime, as the Premier indicated in the legislature on Tuesday, Churchill Falls (Labrador) Corporation got its own legal opinion before sending the request to renegotiate off to Hydro-Quebec. 

And, as he told the House of Assembly on Monday,

As a result, we feel that we need to pursue this and the best way to pursue this is in good faith. The best way to pursue good faith is to have this information [the conclusions of the provincial government’s legal review] passed over to CF(L)Co. It is my understanding that CF(L)Co have announced today that president, Ed Martin, has now written the other shareholders of CF(L)Co to see whether, in fact, in good faith, this matter would be open for renegotiation, and that is a very good thing.

Did you notice that phrase:  “other shareholders in CF(L)Co.”

That would be Hydro-Quebec.

So if Danny Williams is wondering about who is passing sooper sekrits to the enemy, he can look no further than Ed Martin.

Of course, the entire traitor line is just one to distract from what is really going on:  a big bluff. 

After all, if NALCOR and the provincial government were really convinced they could cut a deal, if they really thought they had stumbled on the magic bullet to cure a 40 year old grievance, they’d never have done it in public perhaps before the letter to Hydro Quebec even got to Montreal.

Nope.

If you had any leverage at all, you wouldn’t pull a stunt.

You’d pull the lever.

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